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VISUS CONSULTING GROUP, INC.

FINAL REPORT FEBRUARY 2, 2015 Balancing Your Resources

SUMMARY AUDIT REPORT INTERNATIONAL CYANIDE MANAGEMENT CODE

GOLD MINING OPERATION RECERTIFICATION AUDIT MESQUITE MINE, IMPERIAL COUNTY, CALIFORNIA

Submitted to

INTERNATIONAL CYANIDE MANAGEMENT INSTITUTE 1400 I STREET, N.W., SUITE 550 WASHINGTON, D.C. 20005

and

WESTERN MESQUITE MINES, INC.

(A NEW GOLD INC. COMPANY) 6502 EAST US HIGHWAY 78

BRAWLEY, CA 92227-9306

Prepared by

VISUS CONSULTING GROUP, INC. www.visuscorp.com


SUMMARY AUDIT REPORT

ICMC RECERTIFICATION AUDIT MESQUITE MINE

IMPERIAL COUNTY, CALIFORNIA

VISUS CONSULTING GROUP, INC. i

February 2, 2015

TABLE OF CONTENTS 0.0 General ........................................................................................................................................................... 1

0.1 Operation Contact Information .............................................................................................................. 1 0.2 Location and Description of Operation ................................................................................................... 2 0.3 Cyanide Facilities ................................................................................................................................... 4 0.4 Auditor Information ............................................................................................................................... 5 0.5 Audit Findings ........................................................................................................................................ 6 0.6 Summary of ICMC Principles and Standards of Practice .......................................................................... 7

1.0 Production ...................................................................................................................................................... 9

Standard of Practice 1.1 ................................................................................................................................... 9

2.0 Transportation .............................................................................................................................................. 10

Standard of Practice 2.1 ................................................................................................................................. 10 Standard of Practice 2.2 ................................................................................................................................. 11

3.0 Handling and Storage .................................................................................................................................... 12


4.0 Operations .................................................................................................................................................... 15

Standard of Practice 4.1 ................................................................................................................................. 15 Standard of Practice 4.2 ................................................................................................................................. 17 Standard of Practice 4.3 ................................................................................................................................. 17 Standard of Practice 4.4 ................................................................................................................................. 19 Standard of Practice 4.5 ................................................................................................................................. 20 Standard of Practice 4.6 ................................................................................................................................. 20 Standard of Practice 4.7 ................................................................................................................................. 21 Standard of Practice 4.8 ................................................................................................................................. 23 Standard of Practice 4.9 ................................................................................................................................. 24

5.0 Decommissioning .......................................................................................................................................... 26


6.0 Worker Safety ............................................................................................................................................... 29

Standard of Practice 6.1 ................................................................................................................................. 29 Standard of Practice 6.2 ................................................................................................................................. 30 Standard of Practice 6.3 ................................................................................................................................. 32

7.0 Emergency Response ..................................................................................................................................... 34

Standard of Practice 7.1 ................................................................................................................................. 34 Standard of Practice 7.2 ................................................................................................................................. 35 Standard of Practice 7.3 ................................................................................................................................. 36 Standard of Practice 7.4 ................................................................................................................................. 37 Standard of Practice 7.5 ................................................................................................................................. 37 Standard of Practice 7.6 ................................................................................................................................. 38





VISUS CONSULTING GROUP, INC. ii

February 2, 2015

8.0 Training ......................................................................................................................................................... 40


9.0 Dialogue ........................................................................................................................................................ 44


10.0 References .................................................................................................................................................... 48

LIST OF TABLES Table 1 Summary of ICMC Principles and Standards of Practice for Gold Mining Operations

LIST OF FIGURES Figure 1 Location Map

UNITS OF MEASURE AND ABBREVIATIONS BLM Bureau of Land Management, El Centro Resource Area

Cal/ARP California Accidental Release Prevention Program

CERCLA Comprehensive Environmental Response Compensation and Liability Act

CIC Carbon-in-column

Code International Cyanide Management Code (the Code)

CUPA Certified Unified Program Agency

Cyanco Cyanco Company, LLC

DuPont E.I. DuPont De Nemours and Company, Inc.

EPA U.S. Environmental Protection Agency

ERP CC&V Emergency Response Plan/Procedures

gpm Gallons per minute

H:V Horizontal to vertical





VISUS CONSULTING GROUP, INC. iii

February 2, 2015

UNITS OF MEASURE AND ABBREVIATIONS (CONTINUED) HCN Hydrogen cyanide

HDPE High-density polyethylene

ICMC International Cyanide Management Code

ICMI International Cyanide Management Institute

IRCAP Incident Response and Correction Action Program

LCRS Leachate collection and recovery system

MERT Mine Emergency Response Team

MERV1 Mine Emergency Response Vehicle

mg/L Milligrams per liter

MSDS Material Safety Data Sheet(s)

MSHA Mine Safety and Health Administration

New Gold New Gold Inc.

Newmont Newmont Mining Corporation

PMP Probable Maximum Precipitation

PPE Personal protective equipment

ppm Parts per million

QA/QC Quality Assurance and Quality Control

RWQCB California Regional Water Quality Control Board, Colorado River Basin Region

Sentinel Sentinel Transportation, LLC

SMARA Surface Mining and Reclamation Act

SOP Standard Operating Procedure

Transwood TransWood Inc.

WAD Weak-acid dissociable

WMMI Western Mesquite Mines, Inc.





Mesquite Mine___ NAME OF MINE

_________________________ SIGNATURE OF LEAD AUDITOR

__February 2, 2015_ DATE


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0.0 GENERAL

0.1 Operation Contact Information

Name of Mine: Mesquite Mine

Name of Mine Owner: New Gold Inc.

Name of Mine Operator: Western Mesquite Mines Inc.

Name of Responsible Manager: Mr. Cory Atiyeh, Vice President / General Manager

Address and Contact Information:

Western Mesquite Mines Inc.

6502 East US Highway 78

Brawley, California 92227-9306

Telephone: +1 928.341.4653

Facsimile: +1 928.341.0041

Email: [email protected]









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0.2 Location and Description of Operation The Mesquite Mine is an open pit, heap leach operation located in eastern Imperial County, California alongside U.S. Highway 78 between the towns of Brawley and Blythe, south and adjacent to the foothills of the Chocolate Mountains. The mine site is approximately 35 miles east of Brawley, 24 miles north of the border with Mexico and 16 miles west of the border with the State of Arizona (see Figure 1). Access to the property is via good quality paved roads.

The mineral rights at the Mesquite Mine cover a total area of approximately 4,670 acres comprised of unpatented and patented mining lode claims, patented and unpatented mill site claims, leased State land, and fee lands.

Mining and processing activities began at the Mesquite Mine in 1985 and were discontinued in 2001, at which time the operation entered into a non-mining status although leaching and refining operations continued. In November 2003, the Mesquite Mine was sold to Western Mesquite Mines, Inc. (“WMMI”), a wholly owned subsidiary of Western Goldfields, Inc. and full mining activities resumed in January 2008. New Gold Inc. (“New Gold”) acquired the mine in June 2009 via a business combination with Western Goldfields Inc. New Gold is an intermediate gold producer with a portfolio of global assets located in the United States, Mexico, Australia, Canada and Chile. WMMI, New Gold’s wholly owned subsidiary, currently operates the Mesquite Mine.

The Mesquite Mine utilizes blasting and a conventional truck and shovel open-pit mining method, hauling run-of-mine ore directly to leach pads for processing. Mineral processing is by heap leach in a carbon-in-column (“CIC”) circuit. The operation uses cyanide for mineral processing and practices continual vigilance in its storage, management and use. In October 2011, the Mesquite Mine was first certified under the International Cyanide Management Code (“ICMC” or “Code”).

The primary on-site processing facilities include heap leach pads, process ponds, pipelines and containment channels, a CIC plant and desorption plant, and a refinery. Mining infrastructure and equipment include three open pits, haul roads and ramps, maintenance shops, and the mobile equipment fleet. Ancillary facilities include workshops, warehouses, administration buildings, and dry house facilities.

Six heap leach pads are currently active at the Mesquite Mine (Pads 1 through 6). The Vista Pad was decommissioned and deemed closed by the California Regional Water Quality Control Board, Colorado River Basin









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Region (“RWQCB”) in May 2007. Each of the leach pads is constructed with a composite liner system designed and approved in accordance with State requirements. A permeable geo-textile fabric overlying the composite liner, serves to protect the synthetic membrane liner against puncture and to ensure collection of leachate solution from the base of the stacked ore. Ore is stacked on the liner system in 20-foot high lifts to a height of 300 feet with total ore processing regulated to a maximum of 25 million tons annually from 65 million tons of total mine production (ore and waste). Side slopes of the stacked ore are maintained at an overall slope of approximately two horizontal to one vertical (“2H:1V”).

Tanker trucks, each with a nominal liquid capacity of 8,700 gallons, deliver solid sodium cyanide briquettes to the Mesquite Mine in 40,000-pound loads. After the tanker truck arrives on site, it parks on a concrete offload apron (secondary containment area). The Cyanide Mix Tank is filled to approximately three quarters of its capacity with water and adjusted to proper pH using sodium hydroxide (caustic) solution. The water in the mix tank is added to the briquettes within the tanker truck. The solution is circulated through the mix tank and truck until the concentration of sodium cyanide is approximately 24-30 percent. The sodium cyanide solution is then transferred to the Cyanide Distribution Tank for use in the process.

Sodium cyanide is metered from the Cyanide Distribution Tank into the Barren Solution Sump, as make-up for the heap leach process, at a flowrate of 0.2 gallons per minute (“gpm”). After the sodium cyanide sodium is pumped from the Cyanide Distribution Tank to the Barren Solution Sump, it is diluted by the recycled barren solution flowing at roughly 7,500 gpm, and the resulting barren solution is pumped to the heap leach pads.

Sodium cyanide solution from the Barren Solution Sump, applied to the ore on the leach pads using drip irrigation, leaches gold and silver from the ore. After passing through the ore via gravity, perforated piping installed below the stacked ore and above the primary synthetic membrane liner collects the gold- and silver-bearing (a.k.a. pregnant) solution and conveys it to the lowest elevation within the heap leach facility, from which point it is piped to the gold adsorption circuit (the CIC Plant).

At the CIC Plant, gold and silver are adsorbed onto the carbon particles within the columns, whereby the process solution becomes void of precious metals or “barren”. The barren solution is then rejuvenated with fresh sodium cyanide and makeup water, treated for pH and pumped back to the leach pads for additional leaching of ores. This process is repeated in a continuous manner.

The precious metal adsorbed in the CIC circuit is collected and transported via a contained carbon transfer trailer in the form of carbon paste to the on-site desorption circuit and refinery located near the administration offices. At the Desorption Plant, the loaded carbon is washed with hydrochloric acid and the gold and silver is stripped in a desorption column using caustic solution. The eluate passes through an electrolysis process (electro-winning cells) inside the refinery producing a gold and silver concentrate, which is heated in an induction furnace to produce gold/silver doré. WMMI ships the doré off site to a major refiner where the gold and silver are further refined to bullion.









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0.3 Cyanide Facilities The Code defines a “cyanide facility” as “a storage, production, waste management or regeneration unit for managing cyanide or cyanide-containing process solution,” or “a pollution control device, equipment or installation used to prevent, control or minimize the risk of a cyanide release”. The Code defines “process solution” as any solution with a weak-acid dissociable (“WAD”) cyanide concentration of 0.5 milligrams per liter (“mg/L”) or greater. Based on this criterion, the auditor identified the following primary, active cyanide facilities at the Mesquite Mine:

• Cyanide Mix Tank (18,000 gallons); • Cyanide Distribution Tank (18,000 gallons); • Barren Solution Sump; • Barren Tails Box; • Heap Leach Facilities (leach pads, pipelines and containment channels, process ponds);

− Six heap leach pads (Pads 1, 2, 3, 4, 5, and 6) served by a single solution collection network (the Vista Pad was closed as of May 2007);

− Process solution ponds (Pregnant Pond, Barren Intermediate Pond, and Event Pond); − Pregnant and barren solution transfer pipelines situated within lined secondary containment

channels); • Pregnant Solution Sump; • CIC Plant (two trains, 8 carbon columns active);

− Six 6-ton columns (containing 8 tons of carbon each) − Two 3-ton columns; − Carbon Screens; and

• Associated concrete and lined secondary containment structures, solution transfer tanks/vessels and pipes, valves, and pumps throughout the process areas.

It is important to note that the six leach pads, constructed over time, currently form two active heaps separated by a “slot” area between. Pads 1 through 4 form one heap and Pads 5 and 6 form the second. Pads 1 through 4 are located to the west of Pads 5 and 6. A new proposed expansion, identified as Leach Pad 7, will extend over the area currently occupied by these two heaps as well the “slot” infill area between, to a single maximum height of 300 feet, effectively consolidating these two separate leach pads into a single facility. During this 2014 ICMC recertification audit, WMMI was leaching ore on Pads 5 and 6 only, and initiating construction activities for Leach Pad 7.

Mesquite transfers loaded carbon, via a carbon transfer trailer, from the CIC Plant to the Desorption Plant located next to the refinery. The Desorption Plant consists of the acid wash and strip circuits. Primary components of the wash/strip circuit include the acid wash vessel, strip vessel, and associated transfer tanks/vessels, concrete and lined secondary containment structures, process solution transfer pipes, valves, and pumps. Nonetheless, WMMI uses hydrochloric acid and caustic solution to wash and strip the carbon, respectively, and does not add cyanide









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within the wash/strip circuit. Although the carbon paste/slurry transferred from the CIC Plant to the Desorption Plant contains residual cyanide, WMMI provided analytical data demonstrating that the WAD cyanide concentrations in the paste/slurry are below 0.5 mg/L. Therefore, the Desorption Plant is currently not a cyanide facility by ICMC standards and was not part of this 2014 recertification audit.

Two uses of cyanide at gold mines not presently evaluated under the Code include management of cyanide in laboratories and management of cyanide in gold refining. Therefore, the WMMI laboratory facilities and on-site refinery are currently excluded from Code requirements and were not part of this audit.

0.4 Auditor Information Audit Company: Visus Consulting Group, Inc.

Audit Team Leader: Mark A. Montoya, PE, CEA

Address and Contact Information:

7278 South Sundown Circle

Littleton, Colorado 80120

Telephone: 720.301.0892

Facsimile: 303.797.3643

Email: [email protected]

Audit Dates: September 8 – 12, 2014

I attest that I meet the criteria for knowledge, experience and conflict of interest for Code Verification Audit Team Leader, established by the International Cyanide Management Institute (“ICMI”) and that all members of the audit team meet the applicable criteria established by the ICMI for ICMC Verification Auditors. I further attest that this Summary Audit Report accurately describes the findings of the verification audit conducted for the Mesquite Mine located in Imperial County, California and that the verification audit was conducted in a professional manner in accordance with the ICMC Verification Protocol for Gold Mine Operations (dated October 2009) and using standard and accepted practices for health, safety and environmental audits.

FOR VISUS CONSULTING GROUP, INC.

Mark A. Montoya, PE, CEA President / Principal Lead Auditor and Gold Mining Technical Expert Auditor

mailto:[email protected]�









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0.5 Audit Findings

The operation is in Full Compliance Substantial Compliance Non-Compliance

with the International Cyanide Management Code.

During the previous three-year ICMC audit cycle (occurring over the period October 5, 2011 to date), the Mesquite Mine has not experienced any “significant cyanide incidents” subject to the notification requirements under Item 6 of the ICMC signatory application or any cyanide exposures or releases, which are subject to listing under Question 3 of the ICMC Standard of Practice 9.3. The Mesquite Mine has experienced small spills (i.e., minor releases of cyanide-bearing solutions to soil) over the audit cycle; however, these incidents do not affect the compliance status.

Additionally, WMMI has demonstrated “continued compliance” over this ICMC audit cycle, which includes proper retention of records required for verification. Accordingly, the findings contained herein do not always restate proper records retention under each ICMC Standard of Practice.









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0.6 Summary of ICMC Principles and Standards of Practice For easy reference, Table 1 below provides a summary of the ICMC Principles and associated Standards of Practice.

Table 1 Summary of ICMC Principles and Standards of Practice for Gold Mining Operations

PRINCIPLE STANDARDS OF PRACTICE

1. PRODUCTION: Encourage responsible cyanide manufacturing by purchasing from manufacturers who operate in a safe and environmentally protective manner.

1.1 Purchase cyanide from manufacturers employing appropriate practices and procedures to limit exposure of their workforce to cyanide and to prevent releases of cyanide to the environment.

2. TRANSPORTATION: Protect communities and the environment during cyanide transport.

2.1 Establish clear lines of responsibility for safety, security, release prevention, training and emergency response in written agreements with producers, distributors and transporters.

2.2 Require that cyanide transporters implement appropriate emergency response plans and capabilities, and employ adequate measures for cyanide management.

3. HANDLING AND STORAGE: Protect workers and the environment during cyanide handling and storage.

3.1 Design and construct unloading, storage and mixing facilities consistent with sound, accepted engineering practices and quality control and quality assurance procedures, spill prevention and spill containment measures.

3.2 Operate unloading, storage and mixing facilities using inspections, preventive maintenance and contingency plans to prevent or contain releases and control and respond to worker exposures.

4. OPERATIONS: Manage cyanide process solutions and waste streams to protect human health and the environment.

4.1 Implement management and operating systems designed to protect human health and the environment including contingency planning and inspection and preventive maintenance procedures.

4.2 Introduce management and operating systems to minimize cyanide use, thereby limiting concentrations of cyanide in mill tailings.

4.3 Implement a comprehensive water management program to protect against unintentional releases.

4.4 Implement measures to protect birds, other wildlife and livestock from adverse effects of cyanide process solutions.

4.5 Implement measures to protect fish and wildlife from direct and indirect discharges of cyanide process solutions to surface water.

4.6 Implement measures designed to manage seepage from cyanide facilities to protect the beneficial uses of ground water.

4.7 Provide spill prevention or containment measures for process tanks and pipelines. 4.8 Implement quality control/quality assurance procedures to confirm that cyanide facilities

are constructed according to accepted engineering standards and specifications. 4.9 Implement monitoring programs to evaluate the effects of cyanide use on wildlife,

surface and ground water quality.









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Table 1 (continued) Summary of ICMC Principles and Standards of Practice for Gold Mining Operations

PRINCIPLE STANDARDS OF PRACTICE

5. DECOMMISSIONING: Protect communities and the environment from cyanide through development and implementation of decommissioning plans for cyanide facilities.

5.1 Plan and implement procedures for effective decommissioning of cyanide facilities to protect human health, wildlife and livestock.

5.2 Establish an assurance mechanism capable of fully funding cyanide-related decommissioning activities.

6. WORKER SAFETY: Protect workers’ health and safety from exposure to cyanide.

6.1 Identify potential cyanide exposure scenarios and take measures as necessary to eliminate, reduce and control them.

6.2 Operate and monitor cyanide facilities to protect worker health and safety and periodically evaluate the effectiveness of health and safety measures.

6.3 Develop and implement emergency response plans and procedures to respond to worker exposure to cyanide.

7. EMERGENCY RESPONSE: Protect communities and the environment through the development of emergency response strategies and capabilities.

7.1 Prepare detailed emergency response plans for potential cyanide releases. 7.2 Involve site personnel and stakeholders in the planning process. 7.3 Designate appropriate personnel and commit necessary equipment and resources for

emergency response. 7.4 Develop procedures for internal and external emergency notification and reporting. 7.5 Incorporate into response plans monitoring elements and remediation measures that

account for the additional hazards of using cyanide treatment chemicals. 7.6 Periodically evaluate response procedures and capabilities and revise them as needed.

8. TRAINING: Train workers and emergency response personnel to manage cyanide in a safe and environmentally protective manner.

8.1 Train workers to understand the hazards associated with cyanide use. 8.2 Train appropriate personnel to operate the facility according to systems and procedures

that protect human health, the community and the environment. 8.3 Train appropriate workers and personnel to respond to worker exposures and

environmental releases of cyanide.

9. DIALOGUE: Engage in public consultation and disclosure.

9.1 Provide stakeholders the opportunity to communicate issues of concern. 9.2 Initiate dialogue describing cyanide management procedures and responsively address

identified concerns. 9.3 Make appropriate operational and environmental information regarding cyanide available

to stakeholders.









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1.0 PRODUCTION Encourage responsible cyanide manufacturing by purchasing from manufacturers who operate in a safe and environmentally protective manner.

Standard of Practice 1.1 Purchase cyanide from manufacturers employing appropriate practices and procedures to limit exposure of their workforce to cyanide and to prevent releases of cyanide to the environment.


with Standard of Practice 1.1.

Discussion of the basis for this Finding and any Identified Deficiencies:

WMMI purchases cyanide direct from E.I. DuPont De Nemours and Company (“DuPont”), which is delivered from DuPont’s Memphis, Tennessee production facility to the Mesquite Mine via Solid-to-Solution tanker trucks (Excel II delivery trailers). The current contract period is January 1, 2013 through December 31, 2015 and continues from year to year thereafter unless terminated by WMMI or DuPont at the end of a contract year. The contract has been in effect over the entire period between the 2011 ICMC verification audit and this 2014 recertification audit.

The purchase contract between WMMI and DuPont requires that DuPont remain a signatory to the Code and that the cyanide purchased from DuPont is manufactured only at facilities certified as being in compliance with the Code. DuPont, its production and transportation personnel, distributors and contract transporters are required to comply with all applicable Code Principles, Standards of Practice, performance goals, audit recommendations and certification requirements applicable to DuPont’s production facilities and applicable to transportation to the Mesquite Mine, including the specific compliance matters set out in the Code’s Cyanide Production Verification Protocol and Cyanide Transportation Verification Protocol. DuPont and its transporters (i.e., the entire supply chain) are certified in full compliance with the Code.

On occasion, WMMI also purchases liquid cyanide direct from Cyanco Company, LLC (“Cyanco”) when DuPont experiences supply disruptions. WMMI does not have a written agreement in place with Cyanco; nonetheless, Cyanco and its transporter (i.e., the entire supply chain) are certified in full compliance with the Code. Therefore, WMMI can be found in full compliance with this Standard of Practice without such a written agreement.

Review of the ICMC Summary Audit Reports prepared for the DuPont and Cyanco production facilities provided verification that the cyanide purchased by WMMI for the Mesquite Mine over this ICMC audit cycle, was manufactured at facilities certified as being in full compliance with the Code. WMMI has not purchased cyanide from an independent distributor over this audit cycle.









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2.0 TRANSPORTATION Protect communities and the environment during cyanide transport.

Standard of Practice 2.1 Establish clear lines of responsibility for safety, security, release prevention, training and emergency response in written agreements with producers, distributors and transporters.




As stated in the supply contract between WMMI and DuPont, DuPont is responsible for packaging, labeling, storage prior to shipment, evaluation and selection of routes, storage and security at ports of entry, interim loading, storage and unloading during shipment, transportation to the delivery location, unloading at the delivery location, safety and maintenance of the means of transportation throughout transport, task and safety training for transporters and handlers throughout transport, security throughout transport and emergency response throughout transport, all in accordance with applicable Principles, Standards of Practice, performance goals, audit recommendations and certification requirements of the ICMC.

The supply contract between WMMI and DuPont states that DuPont shall only engage ICMC-certified distributors and contract transporters with respect to the cyanide delivered to the Mesquite Mine. Additionally, the contract specifically states that DuPont, its production and transportation personnel, distributors and contract transporters are required to comply with all applicable Code Principles, Standards of Practice, performance goals, audit recommendations and certification requirements applicable to DuPont’s production facilities and applicable to transportation to the Mesquite Mine, including the specific compliance matters set out in the Code’s Cyanide Production Verification Protocol and Cyanide Transportation Verification Protocol.

WMMI does not currently have a written agreement with Cyanco. Nonetheless, Cyanco and its transporter (i.e., the entire supply chain) are certified in full compliance with the Code; therefore, WMMI can be found in full compliance with this Standard of Practice without such a written agreement (see ICMC Standards of Practice 1.1 above and 2.2 below).









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Standard of Practice 2.2 Require that cyanide transporters implement appropriate emergency response plans and capabilities, and employ adequate measures for cyanide management.




As stated in the supply contract between WMMI and DuPont, DuPont is responsible for transporting the cyanide from its production facilities to the Mesquite Mine in accordance with applicable Principles, Standards of Practice, performance goals, audit recommendations and certification requirements of the ICMC (see ICMC Standard of Practice 2.1 above). Furthermore, as discussed under ICMC Standard of Practice 2.1 above, the contract states that DuPont shall only engage ICMC-certified distributors and contract transporters with respect to the cyanide delivered to the Mesquite Mine. Both DuPont and Cyanco, and their supply chains, are certified in full compliance with the Code (see also ICMC Standard of Practice 1.1 above).

WMMI indicated that DuPont has used Sentinel Transportation, LLC (“Sentinel”) exclusively, as its transporter over the period following the 2011 ICMC initial verification audit. Additionally, WMMI indicated that Cyanco has used TransWood Inc. (“TransWood”) exclusively, as its transporter over the same period. Both transport companies are signatory and certified to the Code. DuPont also lists Miller Transporters, Inc. as a back-up carrier. Miller Transporters, Inc. is also signatory and certified to the Code.

Review of the ICMC Summary Audit Reports prepared for Sentinel and TransWood provided verification that the transportation chains utilized by DuPont and Cyanco to deliver cyanide to the Mesquite Mine over the period between the 2011 ICMC verification audit for the Mesquite Mine and this 2014 ICMC recertification audit, were certified as being in full compliance with the Code. Similar verification was performed regarding Miller Transporters, Inc. WMMI maintains signed bills of lading demonstrating maintenance of custody by the transporters (Sentinel and TransWood) from the points of origin to the Mesquite Mine.









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3.0 HANDLING AND STORAGE Protect workers and the environment during cyanide handling and storage.

Standard of Practice 3.1 Design and construct unloading, storage and mixing facilities consistent with sound, accepted engineering practices, quality control/quality assurance procedures, spill prevention and spill containment measures.




Primarily, WMMI purchases cyanide direct from DuPont, which contracts with transport companies to deliver solid sodium cyanide in briquette form from DuPont’s Carlin, Nevada packaging terminal direct to the Mesquite Mine via DuPont’s Excel II Solid-to-Solution tanker trucks. On occasion, when DuPont experiences supply disruptions, WMMI purchases liquid sodium cyanide from Cyanco, which delivers liquid cyanide from Cyanco’s Winnemucca, Nevada production facility direct to the Mesquite Mine via bulk liquid tanker trucks. In both cases, the cyanide product is delivered to the cyanide mix tank and distribution tank and WMMI escorts the tanker trucks off the Mesquite site immediately following each offload.

The cyanide offload and storage facilities are located outside in an open-air environment. Cyanide storage consists of the closed top, carbon steel, cyanide mix and distribution tanks. An eight-foot tall chain-link fence topped with razor wire surrounds the entire Mesquite Mine site, and security personnel staff the main entrance to the site 24 hours per day, seven days per week. The cyanide offload and storage facilities are located within the fenced perimeter and signage warning of cyanide is prominently displayed.

The facilities include a large, reinforced concrete apron, on which the cyanide delivery trucks park during offloading operations. The apron is large enough to accommodate the cyanide delivery truck and trailer, and has concrete curbing around its perimeter to contain any spills on the slab. The cyanide mix and distribution tanks are located within a common, concrete, secondary containment area consisting of a reinforced concrete slab surrounded by concrete curbing. The two tank foundations are solid mass, concrete pedestals, which provide an impermeable barrier between the tank bottoms and the ground (soil). During the field component of this 2014 ICMC recertification audit, the concrete apron and containment areas were in good repair.

The facilities for unloading, storing and mixing cyanide are designed and constructed in accordance with DuPont’s standards for these types of facilities. According to the Risk Management Plan prepared in accordance with the California Accidental Release Prevention Program (“Cal/ARP”) regulations, the cyanide offload and storage facilities









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were designed in compliance with recognized and generally accepted good engineering practices, installed under permit through the Imperial County Building Department, and the installation meets the California Building Code and seismic zone 4 construction requirements. The equipment is a package designed by DuPont and installed by construction contractors.

The Mesquite Mine site is remote with limited off-site communities located nearby that could potentially be affected by a cyanide release. Off-site residences include the California towns of Holtville (27 miles away) and Brawley (32 miles away), both southwest/west of the site. The Glamis Dunes recreational area and the Glamis Beach Store are located approximately six miles southwest of the site along U.S. Highway 78. Subsequent to the 2011 ICMC verification audit, the Mesquite Regional Landfill facility, operated by Los Angeles County, has been constructed along the southwest perimeter boundary of the Mesquite Mine near the main entrance gate. Nonetheless, the landfill facility is located over one mile away from any on-site cyanide facilities and has been unoccupied and non-operational since its construction. No surface water bodies are located in the immediate vicinity of the Mesquite Mine.

Following the field component of this 2014 ICMC recertification audit, WMMI installed new ultrasonic level meters and high-level alarm systems on the cyanide mix and distribution tanks. Additionally, WMMI implemented a new Standard Operating Procedure (“SOP”), which provides procedures for manually measuring the solution levels in the tanks every six months to check the accuracy of the instrumentation and recalibrate the instrumentation if necessary.

The antiscalant used at the Mesquite Mine is acidic and the antiscalant storage tank is located within a concrete secondary containment area, previously separated from the concrete containment area provided for the cyanide mix and distribution tanks by a curb. Therefore, to ensure proper segregation, following the field audit, WMMI increased the capacity of the antiscalant containment by constructing a containment wall around the antiscalant tank, which also serves to adequately segregate a high-strength cyanide feed line from the antiscalant containment area.

Standard of Practice 3.2 Operate unloading, storage and mixing facilities using inspections, preventive maintenance and contingency plans to prevent or contain releases and control and respond to worker exposures.




WMMI receives cyanide via DuPont’s Excel II Solid-to-Solution tanker trucks, and on occasion, via bulk liquid tanker trucks from Cyanco (see ICMC Standard of Practice 3.1 above). In both cases, the cyanide product is delivered to









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the cyanide mix tank and distribution tank and WMMI escorts the tanker trucks off the Mesquite site immediately following each offload. Therefore, no empty cyanide containers remain on site.

WMMI implements written offloading procedures, which require delivery drivers to rinse any residual cyanide from trucks following offload events. Discussions with the Sentinel driver and review of Sentinel’s procedures during an offload event observed during the field component of this ICMC recertification audit provided verification that the driver rinses the hose connections on the delivery trailer, ensures that the trailer is free of cyanide residue, and washes down the concrete containment pad following offloads.

WMMI also implements written operating procedures to prevent exposures and releases during cyanide offloading and mixing activities. The “Excel II Cyanide Off-Loading SOP” and the “Cyanco Sodium Cyanide Off-Loading SOP” include systematic instructions for connecting hoses and operating pumps and valves during the offload, mixing, and transfer of cyanide for each system. Additionally, the SOPs require the use of proper Personal Protective Equipment (“PPE”) and require a qualified spotter (WMMI operator) to be present during the entire offload process. Furthermore, the Sentinel drivers follow written procedures covering proper hookup, mixing and offloading, which complement the WMMI SOPs.

The WMMI offloading SOPs also provide general procedures for responding to leaks, overflows, or other incidents involving the offload of cyanide using both systems. The current version of the Mesquite Mine Emergency Response Plan (“ERP”) provides procedures for timely cleanup of cyanide spills during offloading events.









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4.0 OPERATIONS Manage cyanide process solutions and waste streams to protect human health and the environment.

Standard of Practice 4.1 Implement management and operating systems designed to protect human health and the environment including contingency planning and inspection and preventive maintenance procedures.




Please refer to Section 0.3 above for a listing of the active cyanide facilities at the Mesquite Mine. WMMI currently implements plans and procedures related to the operation of its cyanide facilities. These written procedural documents cover the Mesquite cyanide facilities and provide measures for managing cyanide in a manner that prevents or controls releases to the environment and exposures to workers and the community. The SOPs identify required PPE and the risks involved with the operating tasks, and adequately describe safe work practices.

The regulatory permits for the Mesquite Mine identify the assumptions and parameters on which the facility designs are based, and stipulate operating requirements for the process facilities. Principally, the Waste Discharge Requirements serve as the operating manual for the process facilities to ensure protection of water quality and the Conditional Use Permit requires safeguards to protect workers, communities and wildlife. WMMI has constructed and operates its process facilities in accordance with these key permit stipulations.

Following the field component of this 2014 ICMC recertification audit, WMMI updated its change management procedure. The current procedure is designed to ensure that WMMI follows the correct identification, review and evaluation procedures for all changes to current environmental and safety management processes. The components include a risk assessment, flowchart, and request form, which must be signed and approved by the Environmental Manager, Safety Manager and Department Manager. WMMI provided a formal copy of the updated procedure along with the associated training records as evidence of implementation.

In accordance with regulatory requirements, WMMI must provide notification and develop a proposed monitoring plan if cyanide is detected in the vadose zone monitoring wells. Operating permits also stipulate that the mine have backup emergency equipment to ensure that the ponds do not overflow; thus, WMMI maintains emergency generators on site as well as redundant pump systems and other critical equipment to manage solution flows during line power outages. Furthermore, WMMI implements contingency procedures for operating the pond









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system during the upset situations. WMMI Process personnel check water/solution levels in the process ponds each shift to ensure that the ponds are operated below critical levels in order to maintain surplus capacity for the design storm event and heap draindown storage volume. During any closure event, whether temporary or permanent, WMMI personnel familiar operating the solution containment and pumping system, including the ponds, would remain on site full time to manage the solutions.

WMMI implements routine inspection and maintenance programs for the Mesquite Mine cyanide facilities, to ensure and document that the facilities are functioning within design parameters for proper management of process solutions. These programs involve inspections conducted each shift, monthly, and semi-annually covering process tanks; secondary containments; leak detection systems in the leach pads and process ponds; pond liners and water levels; pipelines, pumps and valves; and stormwater structures. In addition to the mandatory inspections, WMMI supervisors and the Environmental and Health & Safety departments (EHS Committee) perform “Oversight Inspections”. Inspection forms and checklists document the date of the inspection, the name of the inspector and observed deficiencies, and in almost all cases, provide a section to record assignment of corrective actions and the completion date.

During the field component of this 2014 recertification audit, pregnant and barren solution pipelines, located within the lined pipeline containment channels, were corroded and leaking, and in need of repair and/or replacement. In 2014, WMMI began patching and also replacing the corroded sections of carbon steel pipe with high-density polyethylene (“HDPE”) pipe, and although work was ongoing during the field audit, not all sections had yet been completed (e.g., between the CIC Plant and the process ponds). Therefore, following the field audit, WMMI provided aerial photographs highlighting the segments of carbon steel pipeline that have been repaired and the segments where new HDPE pipe has been installed to replace the corroded steel pipe. WMMI also provided supporting construction documentation to demonstrate that the work was completed to appropriate standards and specifications and explained the repair and fabrication methods implemented. Once all work was complete, WMMI provided comprehensive photographic documentation showing the repaired and replaced pipe sections throughout, clearly depicting the work performed and the condition of the active pipes.

To supplement routine inspections, WMMI implements a preventative maintenance program for critical equipment related to the safe management of cyanide solutions. Routine maintenance is performed on the large pump motors and corrective maintenance is performed on feed pumps, distribution pumps, sump pumps and other critical equipment when issues are identified by routine field inspections. Additionally, WMMI keeps redundant pump systems in stock at the on-site warehouse.

The primary power source for the Mesquite Mine is overhead line power from the local grid. In accordance with regulatory requirements, WMMI maintains a diesel-powered generator at the CIC Plant as a backup power source. The generator is sufficient to power all process pumps and equipment so that the process facilities remain fully operational during line power outages. Additionally, two small diesel-powered generators are maintained at the ponds, which power the pumps at the Pregnant Pond and the Barren Intermediate Pond. WMMI performs routine electrical and mechanical maintenance inspections on the generators.









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Standard of Practice 4.2 Introduce management and operating systems to minimize cyanide use, thereby limiting concentrations of cyanide in mill tailings.

The operation is

not subject to in Full Compliance with in Substantial Compliance with in Non-Compliance with

Standard of Practice 4.2.


This Standard of Practice is not applicable, as the Mesquite Mines is a heap leach operation and does not currently operate a mill.

Standard of Practice 4.3 Implement a comprehensive water management program to protect against unintentional releases.




In 2006, WMMI developed a comprehensive water balance model, using Microsoft Excel® software, to predict system performance during the active life of the proposed expansion of Heap Leach Pads 5 and 6. Specifically, the model was prepared for to estimate freshwater make-up requirements for the leaching circuit under average precipitation conditions using solution application by either wobbler spray or buried drip emitters, and to verify the adequacy of existing solution pond capacities for the planned expansion under the same conditions. During the field component of this 2014 ICMC audit, WMMI was finalizing an update to the water balance model to accommodate an increase in the design solution application rate. The model is designed to accommodate periodic updates during actual heap operations and to incorporate additional pad phasing, pond storage fluctuations, and climatic variations from computed averages for projected operational control of solutions.

Inflows to the water balance system include moisture in the mined ore, precipitation on all lined areas, and freshwater make-up. Stormwater diversion structures and earthen berms are constructed around the perimeter of the heap leach facilities to prevent runoff from upgradient watersheds from entering the lined areas. Outflows









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from the water balance system include the moisture consumed in raising the moisture content in placed ore from the as-mined condition to the heap stack field capacity, and evaporation from application on the heap, from the heap surface, and from process pond water surfaces. The Mesquite water balance operates as a net evaporative system; i.e., under environmental processes, more water exits the system than enters the system. In order for the leaching circuit to operate correctly, additional freshwater must be introduced into the system.

The WMMI Environmental Department manages the water balance model with support from the design engineer to update it as necessary to accommodate facility expansions and to perform evaluations following significant storm events, as warranted.

In accordance with the Waste Discharge Requirements, the pond system must be designed to contain runoff generated by a maximum probable one-hour storm and 24 hours of draindown volume from the heaps, while providing two feet of freeboard. The Mesquite water balance model uses the Probable Maximum Precipitation (“PMP”) event, defined as 4.94 inches of rain occurring in one (1) hour. According to design documentation, the pond system is sized to contain runoff from the maximum probable 100-year, 24-hour event (4.96 inches) and 24 hours of draindown volume from the heaps, while providing two feet of freeboard.

WMMI Process personnel check water/solution levels in the Pregnant Pond and Barren Intermediate Pond each shift. Slope measurements are taken and the inspection log provides critical measurement values, which prompt operators to take action, such as pumping water to another pond as appropriate. Normal operating procedure is to start pumping out the ponds as soon as enough head is available to operate the pumps, with the goal of recycling water as much as possible.

Meteorological data collected at the Brawley, California weather station over the period 1927 to 2005 are input to the model to account for water in the system, prior to the occurrence of the PMP event. Average annual precipitation and evaporation recorded over this period is 2.63 inches and 145.12 inches, respectively, with the wettest monthly average over that period (0.44 inches) occurring in December. The most recent update to the water balance model, completed in 2014 to accommodate an increase in the solution application rate, uses data from the Brawley weather station over this same period. WMMI collects precipitation data from an on-site meteorological station, but does not use the data in the water balance model, as the Brawley weather station has compiled a longer history of data and is located approximately 32 miles southwest of the Mesquite Mine site. Therefore, the precipitation data collected at Brawley is reasonably representative of the mine site.

As discussed under ICMC Standard of Practice 4.1 above, WMMI utilizes diesel-powered generators as a backup power source and maintains redundant pumping equipment on site. Based on the conservative design capacity of the pond system, the water balance model itself does not directly consider the effects of power outages or equipment failures.









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Standard of Practice 4.4 Implement measures to protect birds, other wildlife and livestock from adverse effects of cyanide process solutions.




An eight-foot tall chain-link fence topped with razor wire surrounds the entire Mesquite Mine site. In addition to restricting public access, the fence is designed and regularly maintained to prevent access to the site by desert tortoise and larger terrestrial wildlife. There is no livestock in close proximity to the mine site.

The Pregnant Pond and Barren Intermediate Pond each have floating covers, designed to exclude wildlife and prevent evaporative loss. The cover in the Pregnant Pond includes a port, which allows Process personnel to determine visually if there is adequate water in the pond to operate the pumps, thus exposing open solution in the area of this port. The Event Pond does not have a floating cover and currently, WMMI utilizes the pond as the first point of containment for excess solutions from the heaps and CIC Plant that flow within the lined pipeline containment channels, and then pumps the solution from the Event Pond to the Barren Intermediate Pond for return to the process. Excess solutions from the CIC Plant, conveyed by the overflow pipeline located within the lined containment channel between the plant and the ponds, report directly to the Pregnant Pond.

Nonetheless, during this 2014 ICMC recertification audit, WMMI provided analytical data demonstrating that WAD cyanide concentrations are less than 50 mg/L (i.e., typically 5 mg/L) in the pregnant solutions returning from the heaps and reporting to the transfer pipelines, collection and pipeline containment channels, and pond systems. And although WAD cyanide concentrations in the barren solutions typically range between 65 and 75 mg/L, WMMI normally returns barren solution to the heaps directly from the grate-covered Barren Solution Sump at the CIC Plant and keeps the Barren Intermediate Pond dry, utilizing it as an event pond and/or pump-back pond (even though the pond has a floating cover). Therefore, based on WAD cyanide concentrations in process solutions and management of process flows, other than the perimeter fence, WMMI does not implement or rigorously maintain existing deterrents to restrict access by wildlife to open waters in the collection and pipeline containment channels and in the process ponds.

WMMI Process operators are trained to monitor wildlife activity and mortalities, and to inspect heap leach facilities for ponding on a routine basis. The operation employs drip emitters to apply leach solution to the tops of the heaps and wobblers on the side slopes of heaps, where the potential for ponding is low due to the steep slopes. Overspray is effectively eliminated with the drip emitters and no wobblers were observed operating during









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the field component of this 2014 ICMC recertification audit. Regardless, WMMI implements written procedures to ensure that operators identify and remediate ponding conditions when they occur on the heaps.

WMMI implements wildlife mortality reporting procedures and submits monthly wildlife mortality reports to the Bureau of Land Management, El Centro Resource Area (“BLM”), regardless of whether mortalities occur. Reports reviewed demonstrate that no cyanide-related mortalities have occurred over this over this ICMC audit cycle.

Standard of Practice 4.5 Implement measures to protect fish and wildlife from direct and indirect discharges of cyanide process solutions to surface water.




The Mesquite Mine is designed and operated as a zero-discharge facility (closed system) with no direct discharge to surface water. No surface water bodies exist in the immediate vicinity of the Mesquite Mine. Consequently, in accordance with its Storm Water Pollution Prevention Plan, WMMI monitors stormwater following precipitation events, which generate adequate flow at two on-site sample points. WMMI submits annual reports to the RWQCB, which include WAD cyanide analytical results. Reports reviewed over this three-year audit cycle, indicate that WAD cyanide levels were below the analytical detection limit (<0.01 mg/L) for all samples.

Standard of Practice 4.6 Implement measures designed to manage seepage from cyanide facilities to protect the beneficial uses of ground water.




The Mesquite process construction and operation include a number of seepage control technologies such as composite liner systems at the heap leach pads, composite liner systems with leak detection systems at the process ponds, lined secondary containment channels for solution pipelines, and concrete secondary containment in process areas. The pond system is sized to contain runoff from the maximum probable 100-year, 24-hour event and 24 hours of draindown volume from the heaps, while providing two feet of freeboard. These process ponds









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also have a synthetic membrane cover designed to exclude wildlife and prevent evaporative loss. The Event Pond was designed to function as a temporary storage outlet for excess runoff from the process areas and overflow from the process ponds; therefore, it is constructed with a single synthetic membrane liner and clay underliner with leak detection, and does not have a synthetic membrane cover. However, WMMI installed a new synthetic liner in the Event Pond in 2008 and currently utilizes the pond as the first point of containment for excess solutions from the heaps and CIC Plant that flow within the lined pipeline containment channels, and then pumps the solution from the Event Pond to the Barren Intermediate Pond for return to the process. Excess solutions from the CIC Plant, conveyed by the overflow pipeline located within the lined containment channel between the plant and the ponds, report directly to the Pregnant Pond.

WMMI conducts regular inspections and monitoring of all process facilities to ensure that the operating criteria are being met. Routine visual inspections of the concrete secondary containments at the CIC Plant and the liner systems in the collection and pipeline containment channels and at the ponds are performed to ensure physical integrity of these protective systems. Additionally, WMMI routinely monitors a network of vadose zone wells at the leach pads, the leachate collection and recovery system (“LCRS”) at the three ponds, and groundwater wells both upgradient and downgradient of the process facilities.

Groundwater across the Mesquite Mine site ranges between roughly 180 to 250 feet deep (according to Waste Discharge Requirements) and flows in a southwesterly direction. The make-up water supply for the operation comes from three deep wells drilled into alluvium, approximately three miles southeast of the processing facilities. The beneficial use of the groundwater is Municipal Supply.

WMMI conducts groundwater monitoring both upgradient and downgradient of the process facilities in accordance with the RWQCB Monitoring and Reporting Program stipulated by the Waste Discharge Requirements. WMMI also routinely samples its vadose zone gas and bailer monitoring wells for hydrogen cyanide (“HCN”) gas and cyanide solution, respectively. During this 2014 ICMC recertification audit, the auditor reviewed annual groundwater monitoring reports, submitted to RWQCB over the three-year audit cycle (2011 – 2013) and analytical results for a sample taken in June 2014. Results indicate that Total and Free cyanide concentrations for all samples were below the detection limits, which varied between <0.005 mg/L and <0.1 mg/L. WAD cyanide is not analyzed or reported. WMMI personnel indicated that no solution has been encountered in the vadose wells over the past five years.

Standard of Practice 4.7 Provide spill prevention or containment measures for process tanks and pipelines.











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All cyanide mixing, storage and process tanks at the Mesquite operation are provided with concrete, secondary containment. During the field component of this 2014 ICMC recertification audit, the concrete containments were in good repair. Additionally, WMMI uses carbon steel and HDPE piping materials and piping system components for conveyance of cyanide solutions and slurries. Cyanide storage and process tanks are carbon steel. These materials are compatible with cyanide and high pH solutions.

At the CIC Plant, the process tanks and vessels are set on solid mass, concrete pads or are supported above the concrete slab floor by steel structures. The entire process area provided for the carbon columns is a reinforced concrete pad with a perimeter curb. The cyanide mix and distribution tanks are located within a common, concrete, secondary containment area and are mounted on solid mass, concrete pedestal foundations, which provide an impermeable barrier between the tank bottoms and the ground (soil).

Following the field component of this audit, WMMI modified the cyanide containment area provided for the cyanide mix and distribution tanks by hydraulically connecting it with the caustic solution containment area and constructing two weirs, designed to release spillage onto the adjoining concrete offload apron and ultimately to the lined pipeline containment channel via the barren solution sump overflow pipes. If the overflow pipes were to clog, the surrounding concrete containment slab is keyed to the synthetic liner in the channel, providing another means of conveyance to the channel. Calculations provided by WMMI demonstrate that, accounting for the 100-year, 24-hour storm event, approximately six percent of the tank volume would stay in concrete containment and the remaining 94 percent would report to the ponds via the lined channel. The surplus capacity provided by the pond system to account for the heap draindown volume provides ample secondary containment capacity for the cyanide tanks.

Similarly, the synthetic membrane lined, pipeline containment channel keyed to the north side of the concrete slab at the CIC Plant, provides overflow capacity for the concrete containment provided for the carbon columns and related vessels. Any overflow from the concrete apron provided for the cyanide delivery trucks and from the pregnant and barren solution sumps would also report to the lined channel. As discussed above, the lined containment channel reports to the process ponds, which provide ample containment capacity.

For smaller spills, the concrete secondary containments provided for the cyanide process tanks at the CIC Plant and adjoining cyanide offload and storage facilities have concrete floor sumps with dedicated, automated pumps to collect and remove cyanide solution and slurry spillage for return to the process circuit. The containments and sumps do not have drains open to the environment. Daily visual inspections conducted by Process personnel include the physical integrity and available capacity of the secondary concrete containments, lined areas, and ponds. Therefore, WMMI does not implement written procedures for managing water/solution collected in secondary containments.

All process solution pipelines at the Mesquite operation are located within concrete or synthetic membrane lined secondary containment. Additionally, all pipelines are located above ground with the exception of the short









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segment of pipe running between the Event Pond and the Barren Intermediate Pond, which is equipped with pipe sleeve to provide secondary containment.

Standard of Practice 4.8 Implement quality control/quality assurance procedures to confirm that cyanide facilities are constructed according to accepted engineering standards and specifications.




Please refer to Section 0.3 above for a list of the active cyanide facilities at the Mesquite Mine and to the previous ICMC Summary Audit Report (August 2011) for discussion regarding the construction quality assurance and quality control (“QA/QC”) documentation provided for the cyanide facilities in operation at that time.

New cyanide facilities and modifications to existing cyanide facilities constructed subsequent to the 2011 ICMC verification audit include relocating the carbon columns (Old CIC Plant) from the pond area to the New CIC Plant, and re-plumbing the relocated carbon train at the New CIC Plant to create two separate, parallel trains. There have been no heap leach pad expansions constructed subsequent to the 2011 ICMC verification audit.

WMMI implemented QA/QC programs during the construction of the relocated facilities and provided QA/QC construction documentation for the CIC relocation project, prepared by a professional civil engineer registered in the State of California. Formal QA/QC documentation for the re-plumbing project was not available; as WMMI considered the work a routine field modification.

The QA/QC documentation prepared for the relocation of the carbon columns consists of records approved by Imperial County Planning and Development Services for the concrete foundation and steel structure supporting the tanks. The documentation includes drawings, structural calculations, and an inspection record documenting the inspections made by Imperial County for the various components of construction, including compaction, excavation, forms, reinforcing, framing and structural.

WMMI has retained the original QA/QC documentation for cyanide facilities constructed prior to and subsequent to the 2011 ICMC verification audit. The documentation is archived in hardcopy and/or electronic format.









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Standard of Practice 4.9 Implement monitoring programs to evaluate the effects of cyanide use on wildlife, surface and ground water quality.




WMMI has prepared and implemented written standard procedures for monitoring activities to evaluate the effects of cyanide use on wildlife and water quality. The monitoring plan provides standard procedures for monitoring water quality and describes the protocol to be followed during monitoring and sampling events of groundwater wells, vadose wells and the LCRS. The sampling procedures are in accordance with the California Code of Regulations. All other procedures are based on acceptable regulatory and industry standards.

WMMI implements wildlife mortality reporting procedures and submits monthly wildlife mortality reports to the BLM, regardless of whether mortalities occur. The daily leach pad inspections include wildlife presence and mortalities on the leach pads, where WAD cyanide concentrations typically approach or exceed 50 mg/L. During new hire training, WMMI employees are trained to observe and report wildlife presence and mortalities site wide on a continuous basis.

In accordance with the RWQCB Monitoring and Reporting Program, WMMI must conduct water sampling and analysis according to the most recent version of standard U.S. Environmental Protection Agency (“EPA”) methods and use a laboratory approved by the California Department of Public Health. An established engineering and environmental consulting firm, originally developed the water monitoring procedures, based on the California Code of Regulations and other acceptable regulatory and industry standards. The WMMI Environmental Manager and the Environmental Department personnel manage and administer the protocols.

The water quality sampling procedures list the groundwater monitoring wells, vadose monitoring wells, piezometer monitoring (although the Mesquite operation no longer has piezometers to monitor), and the LCRS monitoring sumps along with the required monitoring method, monitoring frequency and reporting frequency required for each. These sampling procedures also include protocols for sample containers and volumes, sample labeling, sample preservation and storage, and field measurements. The sample handling procedures describe the protocol to be followed for sample custody (chain of custody requirements), packaging and shipment. WMMI sends the water quality samples to an outside laboratory certified in the State of California for analysis.

The WMMI monitoring program is designed to adequately characterize environmental media (i.e., groundwater and stormwater quality and wildlife mortalities) and to identify changes in a timely fashion. In accordance with the Waste Discharge Requirements and associated RWQCB Monitoring and Reporting Program, WMMI currently









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conducts groundwater sampling semi-annually (in June and December) and samples its vadose zone gas and bailer monitoring wells semi-annually for HCN gas and cyanide solution, respectively. Prior to May 2014, WMMI was required to sample its groundwater wells on a quarterly basis. Analytical results are reported to RWQCB semi-annually and annually. WMMI Process personnel inspect the leak detection systems in the leach pads each shift and in the ponds daily, recording flowrates at the leak detection systems in the pads and volumes reporting to the leak detection systems in the Pregnant Pond, Barren Intermediate Pond, and Event Pond. Wildlife monitoring is conducted daily. WMMI does not monitor surface water (see ICMC Standard of Practice 4.5 above).









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5.0 DECOMMISSIONING Protect communities and the environment from cyanide through development and implementation of decommissioning plans for cyanide facilities.

Standard of Practice 5.1 Plan and implement procedures for effective decommissioning of cyanide facilities to protect human health, wildlife and livestock.




The Mesquite Mine operates under three separate closure and reclamation plans and the Conditional Use Permit for the Mesquite Mine requires WMMI to comply with conditions stipulated by all three plans. These plans have been prepared over time to include the original Mesquite Mine, the VCR Expansion area and the Mesquite Mine Expansion area.

Prior to New Gold owning the Mesquite Mine, Newmont Mining Corporation (“Newmont”) prepared the “Mesquite Mine Closure and Reclamation Plan” for the Mesquite Mine Expansion in November 1998, which is included as Appendix B to the “Plan of Operations for Proposed Mesquite Mine Expansion”. The “Mesquite Mine Closure and Reclamation Plan” complies with the California Code of Regulations, BLM guidelines, the California Surface Mining and Reclamation Act (“SMARA”), and the Conditional Use Permit for the Mesquite Mine. Additionally, closure items comply with heap leach closure requirements specified by the Waste Discharge Requirements.

The “Mesquite Mine Closure and Reclamation Plan” contains information regarding demolition, leach pad detoxification, and removal of ponds, wells, tanks and piping. Closure will result in the complete removal of all surface structures associated with the process and ancillary facilities, with the exception of the heap leach pads, which will remain in place following recontouring. All buildings, storage tanks, conveyors, crushers, water and electric utilities, and other smaller structures will be dismantled and removed from the site. Removal of the storage tanks includes rinsing and analysis.

WMMI provided documentation, which shows the major closure activities scheduled for years 2015 through 2028. The schedule shows decommissioning activities for the heap leach facilities occurring through year 2023, building demolition in 2024 and final reclamation and monitoring through year 2028.









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Post-closure monitoring will be conducted to assess surface water and groundwater quality for closure of the heap leach pads, and to determine erosion control and revegetation success for reclamation. Groundwater samples will be collected and analyzed according to the approved RWQCB Monitoring and Reporting Program prepared as a component of the Waste Discharge Requirements. Additionally, visual inspections for surface discharge from the leach pads will be conducted on the same schedule as the groundwater monitoring program.

WMMI updates closure and reclamation procedures as required for mine expansions. In accordance with the Mesquite Mine Expansion Project Reclamation Plan Permit administered by Imperial County, WMMI must submit amendments to the approved plan, detailing proposed changes, for approval. The “Mesquite Mine Closure and Reclamation Plan” is the most current plan, with the previous update occurring in 1999. In 2001, Newmont (the owner at that time) updated the “Mesquite Mine Closure and Reclamation Plan” to accommodate expansion of existing facilities and construction of additional facilities, including expansion of two open pits, expansion of a waste rock storage area, and construction of associated ancillary facilities including roads and stormwater diversion channels. During this ICMC recertification audit, WMMI personnel indicated that there have been no subsequent expansion projects, which have triggered the need to update the 2001 version of the plan. Nonetheless, WMMI updates the associated closure and reclamation cost estimate annually (see ICMC Standard of Practice 5.2 below).

Standard of Practice 5.2 Establish an assurance mechanism capable of fully funding cyanide related decommissioning activities.




The “Mesquite Mine Closure and Reclamation Plan” provides a detailed cost estimate for final reclamation and closure of the entire Mesquite site. The costs reflect third party implementation, and include appropriate overhead cost burdens. Costs for heap closure and surface reclamation activities have been separated for determining bonding requirements between different regulatory agencies. Estimates for existing and approved facilities and surface disturbance have been prepared to update the operation’s existing surety bonds to reflect current conditions. The cost estimate covers all three reclamation plans under which the Mesquite Mine operates (see ICMC Standard of Practice 5.1 above).

In accordance with SMARA, WMMI prepares annual updates to its Financial Assurance Cost Estimate for submittal to Imperial County Planning and Development Services. Following its review and acceptance, Imperial County forwards the estimate to the California Office of Mine Reclamation for final approval. In accordance with its









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Conditional Use Permit, WMMI must update the closure and reclamation cost estimate every five years, at minimum.

Each of the three separate closure and reclamation plans is separately bonded. Three “Reclamation Bonds”, held jointly by Imperial County and BLM, provide financial assurance for a variety of reclamation activities, including earthwork, building demolition and revegetation. Additionally, two “Closure Bonds”, one held by RWQCB and one by BLM, provide financial assurance for treatment of process solution and other work to eliminate the risk of pollution (primarily to groundwater), which would include decommissioning of cyanide facilities. Finally, two miscellaneous bonds provide financial assurance related to occupancy (under a lease agreement) of California state lands and the stabilization of open pits by buttressing activities.

During this recertification audit, WMMI provided a letter from Imperial County (dated September 17, 2013) accepting the 2013 estimated bond amount and referencing the required review by the California Office of Mine Reclamation. WMMI submitted the 2014 Financial Assurance Cost Estimate to Imperial County in March and approval by the County and the State of California is pending. WMMI provided a letter from Imperial County (dated June 23, 2014) stating that the 2014 estimate is under review and instructing WMMI to leave the current financial mechanisms in place until further notice. The current posted bond amount, which is based on the 2013 Financial Assurance Cost Estimate, exceeds the 2014 estimate.









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6.0 WORKER SAFETY Protect workers’ health and safety from exposure to cyanide.

Standard of Practice 6.1 Identify potential cyanide exposure scenarios and take measures as necessary to eliminate, reduce and control them.




WMMI implements procedures describing how cyanide-related tasks are to be conducted. These SOPs cover cyanide-related tasks such as, but not limited to, offloading cyanide, plant and pond operations, and maintenance activities that involve the cyanide solution circuits. Additionally, WMMI implements a Confined Space Program for confined space entry requirements at the mine, including the process areas where cyanide is managed. WMMI recently implemented a new SOP to address equipment decontamination prior to maintenance. These procedures document equipment/PPE requirements, potential health and safety hazards, and operator instructions.

WMMI conducts inspections at the beginning of each shift, which include checking operation of showers and eyewashes, equipment condition, solution leaks and so forth. Prior to each offload of cyanide, the delivery driver also performs an inspection of the offload facilities, which includes housekeeping, shower/eyewash stations, fire extinguishers, cyanide mix pump, tanks, valves, hoses, pipes, and PPE.

Following the field component of this 2014 ICMC recertification audit, WMMI updated its change management procedure. The current procedure is designed to ensure that WMMI follows the correct identification, review and evaluation procedures for all changes to current environmental and safety management processes. The components include a risk assessment, flowchart, and request form, which must be signed and approved by the Environmental Manager, Safety Manager and Department Manager. WMMI provided a formal copy of the updated procedure along with the associated training records as evidence of implementation.

WMMI recently implemented the Incident Response and Correction Action Program (“IRCAP”). As one component of IRCAP, WMMI has installed locked suggestion boxes around the mine offices, in which employees, visitors and contractors can enter IRCAP Forms documenting incidents and related suggestions for corrective actions and other comments. Persons filling out the cards have the choice to identify themselves or remain anonymous. Annual refresher training and routine safety meetings provide additional opportunities for workers to provide input.









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Standard of Practice 6.2 Operate and monitor cyanide facilities to protect worker health and safety and periodically evaluate the effectiveness of health and safety measures.




WMMI controls the pH levels in process solutions by adding sodium hydroxide (caustic) solution at the Cyanide Mix Tank and by adding lime to the ore prior to loading it onto the heap leach pads. WMMI measures pH levels for the barren and pregnant solution at the Barren Solution Sump and the Pregnant Solution Sump, respectively. WMMI procedures indicate that the targeted pH levels for limiting the evolution of HCN gas are 12.0 during offloading and mixing activities and 9.5 for barren solution going to the leach pads. During this 2014 ICMC recertification audit, the auditor spot-checked production reports over the period 2011 through 2014 to verify that the actual pH levels maintained in the process circuit are within the targeted range.

The Mesquite operation has two fixed HCN monitors installed at the CIC Plant where HCN gas generation has been determined to be a potential concern. One monitor is located at the offload area next to the antiscalant tank and the second is located on the west side of the barren and pregnant solution sumps. The fixed systems are each equipped with visual and audible alarms. The strobe light and siren trigger at 2.0 parts per million (“ppm”) and 4.5 ppm, respectively. Standard procedure is to evacuate the area when the audible alarm sounds and investigate when it is safe and after waiting 20 minutes.

Additionally, the Mesquite operation currently has 10 personal, portable HCN gas monitors. WMMI Process personnel wear the portable monitors during their entire work shift, programmed to alarm when HCN gas concentrations reach 2.0 ppm. A second stage alarm triggers when HCN gas concentrations reach 4.5 ppm. During cyanide offloads, the delivery driver and WMMI spotter each wear portable monitors.

WMMI subscribes to a sensor exchange program, whereby every three months, WMMI receives factory-calibrated sensors to replace the current sensors in the fixed HCN gas monitors. The sensors are calibrated at the manufacturer’s factory by trained personnel. Following installation of each calibrated sensor, WMMI performs a bump test. Prior to using the personal, portable HCN gas monitors, WMMI performs bump tests each shift. During this 2014 ICMC recertification audit, the auditor reviewed calibration records for both the fixed and personal monitors for the preceding 12 months.

WMMI has installed signs advising workers that cyanide is present and of the associated dangers. During the field component of this 2014 ICMC recertification audit, placement of warning signage was observed to be generally good. Cyanide warning signs are posted at the main gate; at the CIC Plant and cyanide offload and storage









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facilities, including on piping, tanks and vessels; and at strategic locations along roads leading to the heap leach pads, process pipeline containment channels and the process ponds. Cyanide storage and process tanks and piping are labeled to alert workers of the contents and flow directions. Pipelines containing high-strength cyanide solution are painted red. At the cyanide offload and storage facilities, a sign prohibiting eating, drinking and smoking is located on the bollard and chain perimeter barrier.

In addition to signage, the cyanide-related SOPs document equipment/PPE requirements, and with few exceptions, prohibit smoking, tobacco, eating and drinking. Annual refresher training also addresses the requirement for no eating, drinking or smoking in cyanide use areas.

There are three emergency shower stations located at the CIC Plant; at the east and west ends of the cyanide offload and storage facilities and in the area of the CIC columns. Each shower station is equipped with an eyewash unit. There are two additional eyewash units located within the CIC circuit area, on each end of the upper decks of the carbon columns and at one unit at the process ponds. WMMI utilizes self-contained eyewash stations and the shower units are connected to a freshwater circuit. Process operators check the units daily (each shift) during routine inspections. The auditor spot-checked the showers and several eyewash stations, and those checked were functioning properly.

Fire extinguishers in the process areas are primarily ABC dry units. Only ABC dry units are located where cyanide is handled. WMMI checks fire extinguishers daily (each shift) during the above-noted routine inspections. Additionally, WMMI inspects the hydrants more thoroughly each month. The auditor spot-checked several extinguishers and the units were observed to be easily accessible and clearly tagged.

WMMI maintains Material Safety Data Sheet (“MSDS”) information electronically using a chemical management software application. MSDS for on-site chemicals is available to all employees site wide, 24-hours per day, via the WMMI intranet. MSDS are in English, the language of the workforce. Additionally, hardcopy MSDS is available in the CIC Plant control room and in the Process Department offices. First Aid procedures for treating cyanide exposure caused by inhalation, swallowing and skin absorption are posted on signs at the CIC Plant and at the cyanide offload and storage facilities.

WMMI implements IRCAP to administer incident reporting and investigation processes. The program defines training requirements, assigns responsibilities to supervisors, managers, the Incident Investigation Team, the Health & Safety Department, and the General Manager, and provides the procedure for investigating and evaluating incidents with the intent to determine root causes, appropriate corrective actions and effectiveness of remedial or control measures implemented.









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Standard of Practice 6.3 Develop and implement emergency response plans and procedures to respond to worker exposure to cyanide.




The Mesquite operation has four cyanide antidote kits, located in process areas, the on-site laboratory and the on-site Mine Emergency Response Vehicle (“MERV1”). The kits are stored in locked, glass-front cabinets within temperature-controlled environments. Each kit includes amyl nitrite ampoules, a Cyanokit® (with intravenous hydroxocobalamin) and activated charcoal. WMMI stores medical oxygen with resuscitators in dedicated carrying cases, with each cyanide antidote kit. Potable and/or bottled water and emergency shower and eyewash stations are available at or nearby the antidote kit locations.

The WMMI Health & Safety Department conducts monthly inspections of the cyanide antidote kits to verify that the antidotes, oxygen, and supplies are stocked, operational and within expiry dates, and replaces the items as needed. The Mine Emergency Response Team (“MERT”) members perform routine inspections of emergency response equipment and assessments of emergency response capabilities and preparedness. Inspections cover equipment and first aid/rescue supplies. During this 2014 ICMC recertification audit, the auditor inspected the cyanide antidote kits located at the CIC Plant, Adsorption Plant, and in the ambulance. The antidotes, oxygen, and supplies were stocked, operational and within expiry dates.

The primary means of communication while on site is the radio system. Process operators and supervisors carry radios and each vehicle is equipped with a radio. Additionally, the CIC Plant control room has a landline telephone and cellular telephones are accessible, if needed. WMMI escorts cyanide delivery drivers in and out of the mine site and a WMMI Process operator stays with the driver throughout the offload process.

WMMI has posted signs at the CIC Plant and the cyanide offload and storage facilities, which alert personnel of cyanide and provide instruction regarding recognition and treatment of cyanide overexposure. The signs list exposure symptoms, first aid procedures specific to inhalation, swallowing and skin absorption, rescue procedures, and procedures for administering amyl nitrite. The WMMI MERT members receive routine training in emergency medical response. Additionally, WMMI maintains a fully equipped ambulance (MERV1) on site for use during first response and for transporting victims to outside medical help.

WMMI maintains open dialogue with local medical facilities regarding the potential need to treat patients for cyanide exposure. WMMI recently refreshed written correspondence with Pioneer Memorial Hospital, to formally notify the hospital of the potential need to treat cyanide exposure victims from the Mesquite operation and to confirm that the hospital has adequate and qualified staff, equipment and expertise to treat such patients.









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The New Gold “Crisis Management Plan” requires that simulations and mock scenarios be conducted periodically. Desktop exercises are to be conducted annually and full Crisis Simulations are to be conducted every two years in conjunction with the site. Nonetheless, over this ICMC audit cycle, WMMI had not conducted any cyanide-related mock emergency drills to test response procedures for various cyanide exposure and release scenarios and to determine if its procedures are adequate and if personnel are trained properly. Therefore, following the field component of this 2014 ICMC audit, WMMI conducted a cyanide-related mock drill, in which two plant operators were exposed to cyanide via skin absorption at the CIC Plant. The drill tested the full call-out procedure, which included a simulated call to the Imperial County Sheriff’s Office to dispatch the ambulance service and Fire Department, as well as first aid and release response procedures. Only supervisors (no MERT members) were aware of the drill. WMMI provided a copy of the summary report, which discusses the sequence of events, lists aspects that went well and aspects that require improvement, in addition to the drill participants and key observers. WMMI provided training to Process Department personnel and the MERT members from each crew, addressing the corrective actions identified during the drill. WMMI provided copies of the training presentation and attendance rosters as evidence as evidence of implementation.









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7.0 EMERGENCY RESPONSE Protect communities and the environment through the development of emergency response strategies and capabilities.

Standard of Practice 7.1 Prepare detailed emergency response plans for potential cyanide releases.




The WMMI Health & Safety and Environmental departments administer the Mesquite Mine ERP to address emergency response and mitigation measures, which include response procedures for potential accidental cyanide releases and exposures. The primary objectives of the ERP are to provide for an effective response to emergencies; minimize the effect on personnel and surrounding communities; minimize property and equipment losses; coordinate interdepartmental responses; ensure the cooperation of outside agencies; and provide for the release of accurate information to the public. WMMI couples its ERP with the New Gold corporate “Crisis Management Plan”. Implementation of the “Crisis Management Plan” is required when an incident of significant magnitude threatens to overwhelm the resources of and/or has far-reaching consequences for the company based on specific criteria. The ERP complements the “Crisis Management Plan” to provide emergency and first responder services at the incident location.

Following the field component of this 2014 ICMC recertification audit, WMMI updated its ERP to include response procedures, which consider the types of releases that may reasonably be expected to occur at the site (not previously addressed), consistent with the environmental setting, the nature of potential receptors, and the controls in place at the Mesquite operation. Specifically, response procedures added or enhanced include those that consider cyanide releases during fires and explosions, unloading and mixing activities, power outages and pump failures, uncontrolled seepage, and during failure of heap leach facilities. Additionally, WMMI updated the ERP to specifically address releases of high-strength cyanide and procedures for responding to cyanide exposure victims, including first aid measures and the use of the cyanide antidote kits. Furthermore, the “Excel II Cyanide Off-Loading SOP” and the “Cyanco Sodium Cyanide Off-Loading SOP” include procedures for responding to leaks, overflows, or other incidents involving the offload of cyanide using both systems. The Waste Discharge Requirements for the Mesquite operation stipulate remediation measures for responding to seepage discovered in the groundwater and vadose zone monitoring systems.









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The ERP does not specifically address catastrophic releases of HCN gas from storage or process facilities or releases of cyanide from transportation accidents. Catastrophic releases of HCN gas from storage or process facilities are not reasonably expected to occur at the Mesquite Mine, as all process facilities (with the exception of the refinery) are open-air. Pursuant to statutory obligations regarding Cal/ARP, WMMI completed a Risk Management Plan to evaluate impacts to off-site public receptors from potential cyanide release scenarios and determined that the endpoint for potential impact from a worse case release of HCN gas was well within the Mesquite Mine perimeter boundary. The ICMC-certified cyanide supplier (DuPont) is responsible for emergency response throughout transport, and DuPont’s ICMC-certified transporter (Sentinel) carries a copy of DuPont’s emergency response plan. During the offload event observed during the field component of this 2014 ICMC recertification audit, the Sentinel driver presented a copy of the response plan with documentation regarding approved transportation routes. WMMI does not employ cyanide treatment, destruction or recovery systems; therefore, failure of these systems does not apply to the Mesquite Mine.

Standard of Practice 7.2 Involve site personnel and stakeholders in the planning process.




The Mesquite Mine site is remote with limited off-site communities located nearby that could potentially be affected by a cyanide release. Off-site residences include the California towns of Holtville (27 miles away) and Brawley (32 miles away), both southwest/west of the site. The Glamis Dunes recreational area and the Glamis Beach Store are located approximately six miles southwest of the site alongside U.S. Highway 78. Subsequent to the 2011 ICMC verification audit, the Mesquite Regional Landfill facility, operated by Los Angeles County, has been constructed along the southwest perimeter boundary of the Mesquite Mine near the main entrance gate. Nonetheless, the landfill facility is located over one mile away from any on-site cyanide facilities and has been unoccupied and non-operational since its construction. During this 2014 ICMC recertification audit, WMMI personnel indicated that the Mesquite Regional Landfill representative receives annual refresher training from WMMI, and although not documented, WMMI meets with the landfill personnel on a routine basis.

Emergency response procedures developed for the Mesquite Mine do not designate any responsibilities to outside communities. The Imperial County Sheriff’s Office is the primary contact for outside responders. Once contacted by WMMI, the Sheriff’s Office will contact their contracted Ambulance Service, the Imperial County Fire Department or Air Ambulance Service for activation and response. Nonetheless, the ERP provides contact information for local outside responders, including ambulance services (ground and air), fire services, California Highway Patrol, Chemtrec, DuPont, medical facilities (located in Brawley and Yuma), and the Poison Control









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center. Additionally, the ERP provides contact information for appropriate federal, state and local agencies and emergency services.

WMMI involves site personnel and stakeholders in its response planning process via routine MERT training, implementation of IRCAP, and through various outreach programs. WMMI conducted a Cyanide Stakeholders Meeting in July 2014, in which DuPont provided training to WMMI employees and outside stakeholders as part of WMMI’s community outreach program. Community members in attendance included representatives from the Pioneer Memorial Hospital, El Centro Regional Hospital, El Centro BLM and Imperial County Police Department, and WMMI extended invitations to other stakeholders as well. WMMI personnel indicated that, as a component of its Hazardous Materials Business Plan, WMMI provides the Department of Toxic Substance Control [Imperial County, Local Certified Unified Program Agency (“CUPA”) Office] with a copy of the Mesquite ERP, which in turn, maintains centralized data accessible to outside responders. Finally, WMMI provides the public with opportunities to communicate issues of concern through various other means (see ICMC Standard of Practice 9.1 below).

Standard of Practice 7.3 Designate appropriate personnel and commit necessary equipment and resources for emergency response.




The ERP and “Crisis Management Plan” identify emergency response roles as well as appropriate response and remediation equipment. The ERP establishes an Incident Command System, which is an organized system of roles, responsibilities, standard operating procedures and guidelines used to manage and direct emergency operations to respond and mitigate emergency incidents. The ERP designates Incident Commanders and technical advisors for anticipated emergencies at the site, and their associated responsibilities are described under the standard operating procedures for various emergency incidents. The Incident Commander, his or her designee, or the Acting Incident Commander will contact outside agencies or personnel for assistance.

WMMI has established a standing MERT designated to respond to all major emergencies. The MERT comprises employees who receive special training in mine emergency response activities and functions as the primary responders to all emergencies. At the time of this recertification audit, WMMI had approximately 25 MERT members trained to respond to cyanide exposures. All on-duty members of the team respond upon notification, and at minimum, three team members are available for response on each rotating 12-hour shift. MERT members perform routine inspections of the emergency and spill response equipment listed in the ERP.

WMMI has recently provided a letter to Pioneer Memorial Hospital notifying the hospital that it could potentially be asked to treat cyanide exposure victims from the Mesquite operation and that WMMI understands that the









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hospital has adequate and qualified staff, equipment and expertise to treat such patients. The letter also explained that WMMI has antidote supplies on hand, which would accompany any potential victim transported to the hospital.

Standard of Practice 7.4 Develop procedures for internal and external emergency notification and reporting.




The ERP provides procedures for incident reporting and investigation, including internal and external emergency notification to management personnel, outside responders, and federal, state and local regulatory agencies and emergency services. Detailed contact lists for these entities are provided in the ERP. The “Crisis Management Plan” provides the roles, responsibilities, and contact information for the Crisis Management Team.

The Mesquite Mine site is remote with limited off-site communities located nearby, which could potentially be affected by a cyanide release (see ICMC Standard of Practice 7.2 above). Therefore, other than for outside responders and the media, the ERP does not provide procedures and/or contact information for notifying potentially affected communities of cyanide-related incidents. The Imperial County Sheriff’s Office is the primary contact for outside responders. Once contacted by WMMI, the Sheriff’s Office will contact their contracted Ambulance Service, the Imperial County Fire Department or Air Ambulance Service for activation and response.

Only the Incident Commander, his or her designee, or the Acting Incident Commander will contact outside agencies or personnel for assistance. The Vice President/General Manager is responsible for handling all public informational needs, including coordination with the media.

Standard of Practice 7.5 Incorporate into response plans and remediation measures monitoring elements that account for the additional hazards of using cyanide treatment chemicals.












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Cyanide solution released outside of containment would flow to soil in all cases, as there are no surface water bodies located in the immediate vicinity of the operation and groundwater across the Mesquite Mine site ranges between roughly 180 to 250 feet deep. In the event of a cyanide solution release outside of concrete or lined secondary containment, WMMI would construct earthen berms to contain the released solution. Once contained, the solution would be pumped back into a concrete or lined containment area.

Following pumping, WMMI would implement its Environmental Policy, “Reporting a Spill/Material Release”, which defines the endpoint of the remediation for contaminated soils; including how samples will be taken, what analysis will be performed, and what final concentration will be allowed in residual soil as evidence that the release has been completely cleaned up. In accordance with this policy, impacted soils would be sampled and all contaminated materials excavated and placed on the heap leach pads. For small spills, WMMI indicated that the contaminated soils would be excavated completely (i.e., dig to dry). Any adsorbents and containment materials used would be placed into barrels for off-site disposal.

WMMI personnel stated that a release from the operation could not reasonably adversely impact drinking water, as there are no drinking water supplies located nearby the Mesquite site. WMMI has two off-site wells located approximately three miles away on the south side of Highway 78, which are used for potable water and no other public wells are located nearby. Consequently, WMMI recently updated its ERP to eliminate the use of neutralizing agents and to limit remediation measures to soil excavation and removal.

In accordance with the RWQCB Monitoring and Reporting Program, WMMI must report any accidental seepage, spillage, leakage, or release of “waste material” from the designated area within 48 hours after discovery and file a written with the RWQCB within seven days characterizing the discharge and describing corrective measures underway or proposed. If WMMI concludes that a release has occurred, it must takes steps to perform monitoring and submit a Revised Report of Waste Discharge proposing an Evaluation Monitoring Program within 90 days, and submit a preliminary engineering feasibility study within 180 days for remediation.

Standard of Practice 7.6 Periodically evaluate response procedures and capabilities and revise them as needed.




As stated in the ERP, the Health & Safety Department and the Environmental Department coordinate to update the ERP as needed. WMMI personnel indicated that the ERP is reviewed annually and revised as warranted, as a component of its Hazardous Materials Business Plan. Additionally, in accordance with the New Gold “Crisis Management Plan”, the Crisis Coordinators are responsible for ensuring that the “Crisis Management Plan” and









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the ERP are reviewed annually and revised as necessary. The ERP was initially developed in December 2007. Subsequent updates, as indicated on the ERP cover page, occurred in February 2013, October 2013, February 2014, August 2014, September 2014, and most recently in November 2014. New Gold last revised the “Crisis Management Plan” in October 2013 and updated corporate team members in May 2014.

The Health & Safety and/or Environmental departments are responsible for ensuring that an incident investigation is conducted following all emergencies. In accordance with the ERP, WMMI will investigate the incident as soon as possible following its occurrence. The investigation will focus on determining the root cause(s) of the incident and possible procedural or system modifications required to prevent a reoccurrence. Additionally, the Health & Safety and/or Environmental departments and department managers are responsible for conducting a detailed assessment following an incident. The major emphasis of this assessment will be to determine any damage to facilities, safety hazards, and actions necessary to minimize further damage, and repairs that must be initiated to restore the facility to operational use.

Critiques of incidents are required to review what actions took place during the incidents, both good and bad. Critiques are designed to allow for the flow of ideas and recommendations to improve the ERP and the operation’s response policies and guidelines. An employee-debriefing meeting will be held to inform personnel about the events of an emergency and any hazards that may remain on the facility property following an incident.

Additionally, WMMI developed and implemented IRCAP for the purpose of administering incident reporting and investigation processes. Under IRCAP, an incident is defined as “an event which results in harm or loss to persons, property, production or the environment, or where under slightly different circumstances (Near Miss) harm or loss may have occurred”. The program defines training requirements, assigns responsibilities to supervisors, managers, the Incident Investigation Team, the Health & Safety Department, and the General Manager, and provides the procedure for investigating and evaluating incidents with the intent to determine root causes, appropriate corrective actions and effectiveness of remedial or control measures implemented.

As discussed under ICMC Standard of Practice 6.3 above, following the field component of this 2014 ICMC audit, WMMI conducted a cyanide-related mock drill, in which two plant operators were exposed to cyanide via skin absorption at the CIC Plant. WMMI provided training to Process Department personnel and the MERT members from each crew, addressing the corrective actions identified during the drill. No corrective actions resulting from the drill required revisions to the procedures included in the ERP.









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8.0 TRAINING Train workers and emergency response personnel to manage cyanide in a safe and environmentally protective manner.

Standard of Practice 8.1 Train workers to understand the hazards associated with cyanide use.




WMMI trains all employees in cyanide awareness and first aid as part of new hire and annual refresher training. All new hires and contractors are required to view a video produced by DuPont that speaks to cyanide awareness, exposure scenarios and first aid. Specifically, the video covers general facts about cyanide, exposure scenarios and symptoms, HCN gas emissions, first aid, medical treatment, and proper storage of antidotes. In addition to viewing the DuPont video, contractors working in cyanide areas receive site-specific training.

The “Mesquite Mine Cyanide Safety Program” policy applies to all employees, contractors, vendors and visitors who have a potential for cyanide exposure, with the purpose to prevent and protect against cyanide-related injury and illness. In accordance with this policy, employees working with or handling cyanide in any form must first receive training in safe handling and first aid procedures, and must remain under the observation of a similarly trained employee while such operations are in progress. Additionally, all delivery personnel receive orientation training, which includes the location of cyanide antidote kits, the function of cyanide monitors and alarms, and evacuation procedures. WMMI addresses the requirements of this policy in new hire and annual refresher training.

WMMI provides annual refresher training regarding cyanide safety in conjunction with required Mine Safety and Health Administration (“MSHA”) annual refresher training. Additionally, during this ICMC audit cycle, WMMI conducted a Cyanide Stakeholders Meeting, in which DuPont provided cyanide awareness and first aid training to WMMI employees and outside stakeholders.

The WMMI Health & Safety Department manages and maintains training records for all employees. WMMI uses MSHA Form 5000-23 as documentation of new hire, refresher and contractor training. In addition to the MSHA forms, personnel files include a listing of all training completed over the duration of employment. The auditor reviewed personnel files to verify that employees receive required training.









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Standard of Practice 8.2 Train appropriate personnel to operate the facility according to systems and procedures that protect human health, the community and the environment.




Completion of “task training” forms for the SOPs currently implemented at the Mesquite operation is required for cyanide-related (and non cyanide-related) work tasks. The forms document training dates and signatures of instructors and trainees. The initial training does not authorize trainees to perform the associated work tasks unsupervised; however, the trainee must complete the training requirements and receive an MSHA Form 5000-23 before performing the tasks unsupervised. This task-specific training supplements the cyanide safety training provided to all employees.

WMMI provides task-related refresher training if workers change jobs/areas. Workers receive training on the associated SOP and spend time with the Lead Operator until familiar with the task. Additionally, if an SOP changes for any reason, workers receive new training on the task and related changes.

The WMMI Lead Operator, certified by MSHA as a qualified trainer, provides the required task training, which includes review of the related SOP and hands-on demonstration, prior to new employees performing a work task unsupervised. WMMI workers interviewed during this ICMC recertification audit demonstrated a strong understanding of their work tasks.

WMMI does not employ a formal examination or testing procedure (i.e., written exams or quizzes) for evaluating effectiveness of task-related training. Nonetheless, WMMI does implement an “Employee Contact / Job Task Observation” program whereby supervisors are required to observe employees performing job tasks, six times each month. The Job Task Observation cards document the person initiating the contact; the employee contacted; conditions/practices observed; actions taken, recommended or required; lessons learned, and follow up actions and completion dates. WMMI also completes “Safe Work Plans” before beginning any non-routine activity, in which the potential may exist for harm to people, property, environment, business, or reputation; and for which an SOP is not available.

The Health & Safety Department manages and maintains training records for all employees. Each employee file contains a history of training completed over the duration of employment. WMMI documents training via task training forms for SOPs and MSHA 5000-23 forms. The training records include the name of the trainer, date of training and topics covered.









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Standard of Practice 8.3 Train appropriate workers and personnel to respond to worker exposures and environmental releases of cyanide.




The protocol for responding to cyanide releases and exposures is for workers witnessing the event to secure the area and notify their immediate supervisor. Any employee discovering a situation that escalates beyond a minor incident, injury or illness will at once report it to his/her supervisor who will then take charge of the scene. Upon identification of a major incident, an employee, vendor and/or contractor will initiate the emergency call-out procedure.

MERT members function as the primary responders to all emergencies. The Health & Safety Department administers the MERT training programs using both company and outside resources. In accordance with the ERP, MERT personnel receive monthly training on emergency response medical procedures, on effective firefighting techniques using WMMI equipment, on basic rescue procedures, and on hazardous material first responder operations. Additionally, MERT members are routinely trained on first aid and response procedures, and cyanide-related scenarios are enacted at least once per year. As a first line of defense, Process personnel and MERT members are trained to administer amyl nitrite ampoules with oxygen. The most recent Cyanide Awareness Training seminar, provided by DuPont in July 2014, covered chemical decontamination.

Emergency response procedures developed for the Mesquite Mine do not designate any responsibilities to outside communities. Due to the remote setting of the Mesquite Mine, WMMI expects to be the primary responder for all types of incidents, and as per the Emergency Notification Requirements for the Mesquite Mine, WMMI would request outside resources as needed. The Imperial County Sheriff’s Office is the primary contact for outside responders. Once contacted by WMMI, the Sheriff’s Office will contact their contracted Ambulance Service, the Imperial County Fire Department or Air Ambulance Service for activation and response. For easy reference during an emergency, the emergency contact list (Emergency Phone Numbers) provides latitude and longitude coordinates for the Mesquite Mine heliport as well as the general location of the mine.

WMMI conducted a Cyanide Stakeholders Meeting in July 2014, in which DuPont provided training to WMMI employees and outside stakeholders as part of WMMI’s community outreach program. Additionally, WMMI has established formal written correspondence with Pioneer Memorial Hospital regarding the potential need to treat cyanide exposure victims. As a component of the Hazardous Materials Business Plan, WMMI provides the









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Department of Toxic Substance Control (Imperial County CUPA Office) with a copy of the Mesquite ERP, which in turn, maintains centralized data accessible to outside responders.

See ICMC Standards of Practice 6.3 and 8.3 above. The mock drill that WMMI conducted following the field component of this 2014 ICMC recertification audit, to test response procedures for cyanide exposures and releases, was evaluated from a training perspective to determine if personnel have the knowledge and skills required for effective response and so that training procedures can be revised if deficiencies are identified.

WMMI provided documentation demonstrating that it retains records of the emergency response training provided, as discussed above. MERT training records include the name of the trainer, date of training, an attendance roster, topics covered, and roundtable discussion and debrief notes.









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9.0 DIALOGUE Engage in public consultation and disclosure.

Standard of Practice 9.1 Provide stakeholders the opportunity to communicate issues of concern.




WMMI employs a full-time Community Relations Manager to ensure that WMMI remains actively engaged in the local and regional community, and serves as the primary point of contact with respect to inquiries or complaints regarding the operation. WMMI provides several means for stakeholders to communicate issues of concern regarding cyanide use and management at the Mesquite Mine, including: hosting periodic Cyanide Stakeholders Meetings; giving regular presentations to civic-oriented groups; hosting and participating in career fairs; providing tours of the Mesquite operation to elected officials as well as representatives from the local Native American tribe; and publishing advertisements in local newspapers, which provide WMMI contact information and solicit comments, suggestions and questions.

The New Gold website states, “The Mesquite mine is a long-standing member of the local community, and we strive to maintain our strong reputation while forging new relationships with key decision makers. We have ongoing outreach efforts with the community, and provide informational programs for community organizations, service clubs and schools. We make regular community presentations to maintain a two-way dialogue with our local stakeholders. We remain in regular contact with federal and state regulators, regional mining and mineral enthusiasts, and community-based organizations.”

See more at http://www.newgold.com/properties/operations/mesquite/sustainability-and-environment/default.aspx#sthash.m97mpMWT.dpuf

Additionally, New Gold implements an External Complaint Flow Management Procedure. Using this protocol, WMMI ensures prompt follow-up by qualified personnel regarding complaints filed by external stakeholders. Complaints are assessed, investigated, resolved and communicated within 30 days of receipt. Finally, the public review process offered by federal, state and county permitting processes solicits input from affected communities and stakeholders regarding all aspects of the operation.

http://www.newgold.com/properties/operations/mesquite/sustainability-and-environment/default.aspx#sthash.m97mpMWT.dpuf�

http://www.newgold.com/properties/operations/mesquite/sustainability-and-environment/default.aspx#sthash.m97mpMWT.dpuf�









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Standard of Practice 9.2 Initiate dialogue describing cyanide management procedures and responsively address identified concerns.




Please see ICMC Standard of Practice 9.1 above. The meetings, presentations, tours and local advertisements discussed, provide regular and ample opportunities for stakeholders to interact with WMMI personnel and obtain information regarding cyanide management practices and procedures. WMMI conducted a Cyanide Stakeholders Meeting in July 2014. During the meeting, DuPont provided training to WMMI employees and outside stakeholders as part of WMMI’s community outreach program.

Standard of Practice 9.3 Make appropriate operational and environmental information regarding cyanide available to stakeholders.




Available via the New Gold website, the Mesquite Mine relies primarily on the New Gold annual sustainability reports for the purpose of disseminating written descriptions to communities and other stakeholders regarding its management of cyanide and cyanide-related practices. The sustainability reports reviewed for the years 2011 through 2013 mention the use of cyanide and certification of the Mesquite Mine under the ICMC; however, they do not necessarily provide an educational overview of cyanide-related activities and management practices. Nonetheless, the written regulatory permits and permit applications associated with the Mesquite Mine provide detailed descriptions of all aspects of the operation and are public record. Additionally, as a signatory company to the ICMC, WMMI was initially certified under the Code on October 5, 2011 and the summary report for the initial verification audit is available to the public via the ICMC website. The New Gold website advertises that the company is signatory to the Code and that the Mesquite Mine is certified. Although WMMI has demonstrated compliance under this ICMC Standard of Practice regarding development and dissemination of written descriptions of its cyanide management practices, the auditor recommended that WMMI consider creating a brochure (or other educational materials), describing its cyanide management practices and management safeguards, for









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dissemination at the mine office, at locations in local communities, at public forums or meetings, libraries, local government offices, on websites, or through other means.

According to the National Center for Educational Statistics, as of 2003, approximately 41 percent of Imperial County residents lacked basic prose literacy skills (this includes "those who could not be tested due to language barriers"). Nonetheless, WMMI disseminates information in verbal form via open meetings, presentations, tours and civic events, as discussed under ICMC Standard of Practice 9.1 above. Additionally, WMMI publishes advertisements in local newspapers, written in both English and Spanish, which provide WMMI contact information and solicit comments, suggestions and questions from outside stakeholders.

All cyanide releases over this ICMC audit cycle occurred on site and none resulted in significant adverse effects to health or the environment. Additionally, no cyanide exposure incidents occurred over this period. WMMI personnel indicated that the notification protocol in the ERP is designed to meet all appropriate regulatory reporting requirements (including timelines) that apply to a release.

WMMI reports all spills outside of containment to regulatory agencies, regardless of quantity. Regulatory spill limits are defined in the Waste Discharge Requirements and the Code of Federal Regulations. Any spill or release of a hazardous material that exceeds the reportable quantity limits requires immediate (verbal) notification of regulatory agencies, including the California Governor’s Office of Emergency Services, Imperial County Public Health Department, CUPA, RWQCB and BLM. Additionally, WMMI must submit a written summary to RWQCB within seven days of the verbal notice. According to regulations promulgated under the Comprehensive Environmental Response Compensation and Liability Act (“CERCLA”), release of a reportable quantity of a listed hazardous material to the environment in any 24-hour period requires immediate reporting to the National Response Center. Cyanide has a federal reportable quantity of 10 pounds.

Written reports submitted to regulatory agencies become public information. Contact information for the agencies and other sources referenced above, where the public can access information regarding cyanide releases or exposure incidents that may occur at the Mesquite Mine, is provided below for easy reference:

73-720 Fred Waring Drive, Suite 100 Palm Desert, CA 92260

California Regional Water Quality Control Board, Colorado River Basin Region (RWQCB)

Phone: (760) 346-7491 Website: www.waterboards.ca.gov/coloradoriver

935 Broadway Avenue, El Centro, CA 92243 Phone: (760) 482-4438

Imperial County Public Health Department

Website: www.icphd.com

http://www.waterboards.ca.gov/coloradoriver�

http://www.icphd.com/�









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1001 "I" Street, P.O. Box 2815, Sacramento, CA 95812 Phone: (916) 327-9559

California Certified Unified Program Agency (CUPA)

Website: www.calepa.ca.gov/cupa

1661 S. 4th Street El Centro CA 92243

Bureau of Land Management, El Centro Field Office (BLM)

Phone: (760) 337-4400 Website: www.blm.gov/ca/st/en/fo/elcentro.html

3650 Schriever Avenue California Governor’s Office of Emergency Services

Mather, CA 95655 Phone: (916) 845-8510 Website: www.calema.ca.gov

2100 2nd Street, SW National Response Center

Washington, DC 20593-0001 Phone: (202) 267-2675 or toll free (800) 424-8802 Website: www.nrc.uscg.mil

http://www.calepa.ca.gov/cupa�

http://www.blm.gov/ca/st/en/fo/elcentro.html�

http://www.calema.ca.gov/�

http://www.nrc.uscg.mil/�









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10.0 REFERENCES SAI Global, 2011. “Detailed Audit Findings Report for the Mesquite Mine, prepared for Western Mesquite Mines,

Inc.” July 19-27, 2010 and March 2-18, 2011

WEBSITE REFERENCES International Cyanide Management Code (ICMC). 2014. www.cyanidecode.org

http://www.cyanidecode.org/�

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